Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
You have a mound of debt and you’re not sure how to repay it. You’ve considered taking out a personal loan to consolidate the debt, but it’s hard to find debt consolidation loans for bad credit.
If you’ve had issues repaying your debts, you might have damaged your credit score. The very reason you need a consolidation loan might also be why you can’t get one.
Here’s a look at resources that can help you if you need a debt consolidation loan for bad credit.
Debt consolidation loans and credit scores
Borrowers can use a debt consolidation loan to pay off debts and replace them with a single loan. The new loan is a chance to lower monthly payments or find a cheaper interest rate.
But qualifying for a new loan with bad credit is tricky. Loan applicants will need a credit score in the mid-600s or higher for easy approval and low rates.
With a credit score below that, it will take some work to find loans for which you qualify. Expect to accept some tradeoffs, such as limited options in lenders and loan types, and higher interest rates or loan fees.
7 ways to get debt consolidation loans for bad credit
A bad credit score will make it trickier to qualify for a loan, but it’s still possible to get debt consolidation loans for bad credit. Try the following to get the debt consolidation loan you need — even with poor credit.
1. Student loan consolidation options
If the debt you’re trying to consolidate is student loans, you’re in luck.
Student loans are much harder to get rid of than other debts and aren’t dischargeable in bankruptcy. For lenders, this makes student loans a less risky form of debt. For borrowers, this can mean lower and more flexible credit requirements to qualify for student loan refinancing.
Lenders such as Earnest, for instance, have no minimum credit requirements for student loan refinancing. They will look at your credit score, but they also consider your application based on criteria such as your education and employment history.
If you’re struggling with student debts, you’ll want to consider other options as well. Federal student loan consolidation could help, as well as income-driven repayment plans.
2. Try lenders with low credit score minimums
If you have a low credit score, don’t automatically assume you can’t get a loan. Lenders have different credit requirements and many are willing to consider lending to those with bad credit.
With some searching, you can find a debt consolidation loan for bad credit.
Avant, for example, offers unsecured personal loans for borrowers with credit scores as low as 580. Similarly, Upstart considers borrowers with credit scores as low as 620. Make sure you read lender reviews and choose a reputable lender. Also, keep in mind that a lower credit score might result in higher interest rates.
3. Get a cosigner
Many lenders won’t offer debt consolidations loans for people with bad credit, but they might approve your loan application if you have a co-applicant with good credit.
To get a cosigner on a debt consolidation loan for bad credit, you’ll need two things: a willing cosigner and a lender who allows co-applicants. Lenders such as Citizens Bank and Earnest allow cosigners for their personal loans.
See if a partner or family member who has good credit is willing to cosign the loan and you’ll have a better chance of approval on debt consolidation loans for bad credit.
4. Check with a credit union
Credit unions are not-for-profit financial institutions that focus on serving a community. Credit unions often offer less-conventional products, including debt consolidation loans for people with bad credit. Members often get some of the lowest rates when borrowing from a credit union.
Check with local or national credit unions to see what options they offer for your credit score. A credit union might have personal loans designed specifically for borrowers with poor credit.
A credit union’s loan officers also often have more say in the underwriting process, so you can make your case to a human instead of getting an immediate rejection from a computer algorithm.
5. Nonprofit debt consolidation
In addition to credit unions, there are some nonprofit organizations dedicated to helping people manage and get out of debt. These nonprofit debt counseling agencies often offer free credit counseling and debt assistance.
Find a nonprofit debt counseling organization in your community or that offers services nationally. You should verify its not-for-profit, 501(c)(3) status.
Once you’re connected with these services, many of them will have a credit counseling session to explore your debts and repayment options. They might be able to connect you with lenders that offer debt consolidation loans for bad credit.
Some also offer in-house debt consolidation through a debt management program. The nonprofit organization can even negotiate with lenders on your behalf to lower rates or cancel a portion of your balances. However, you will likely face an additional service fee to set this up, as well as ongoing maintenance fees.
6. Secured loan
If you have some assets, you might consider borrowing against them with a secured loan to consolidate your debts. With a secured loan, your asset — such as a car or home equity — is collateral that the lender uses to guarantee the loan.
A secured loan has the obvious drawback of putting your property at risk. If you default, your lender can seize your property to settle the debt. But it also lowers the lender’s risk, so it’s much easier to get approved for a debt consolidation loan with bad credit.
It’s worth considering other options first, such as liquidating your asset and repaying debts with cash. But if the collateral is something you want to keep, a secured loan can help you keep ownership while borrowing the funds you need to consolidate debts.
7. Work on your credit and try again later
Last but not least, you can always spend some time repairing your credit and try again in a few months. If you can raise your credit score even 30 or 50 points, you can improve your chances of getting approved for a debt consolidation loan.
If your credit score is right on the verge of average (600 to 650), it can be worthwhile to focus on rebuilding credit.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|